Correlation Between Repower Asia and Duta Pertiwi
Can any of the company-specific risk be diversified away by investing in both Repower Asia and Duta Pertiwi at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Repower Asia and Duta Pertiwi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repower Asia Indonesia and Duta Pertiwi Tbk, you can compare the effects of market volatilities on Repower Asia and Duta Pertiwi and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Repower Asia with a short position of Duta Pertiwi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repower Asia and Duta Pertiwi.
Diversification Opportunities for Repower Asia and Duta Pertiwi
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Repower and Duta is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Repower Asia Indonesia and Duta Pertiwi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duta Pertiwi Tbk and Repower Asia is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Repower Asia Indonesia are associated (or correlated) with Duta Pertiwi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duta Pertiwi Tbk has no effect on the direction of Repower Asia i.e., Repower Asia and Duta Pertiwi go up and down completely randomly.
Pair Corralation between Repower Asia and Duta Pertiwi
Assuming the 90 days trading horizon Repower Asia Indonesia is expected to generate 1.38 times more return on investment than Duta Pertiwi. However, Repower Asia is 1.38 times more volatile than Duta Pertiwi Tbk. It trades about 0.02 of its potential returns per unit of risk. Duta Pertiwi Tbk is currently generating about -0.01 per unit of risk. If you would invest 800.00 in Repower Asia Indonesia on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Repower Asia Indonesia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Repower Asia Indonesia vs. Duta Pertiwi Tbk
Performance |
| Timeline |
| Repower Asia Indonesia |
| Duta Pertiwi Tbk |
Repower Asia and Duta Pertiwi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repower Asia and Duta Pertiwi
The main advantage of trading using opposite Repower Asia and Duta Pertiwi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repower Asia position performs unexpectedly, Duta Pertiwi can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Duta Pertiwi will offset losses from the drop in Duta Pertiwi's long position.| Repower Asia vs. Prima Alloy Steel | Repower Asia vs. Trinitan Metals and | Repower Asia vs. PT Homeco Victoria | Repower Asia vs. Steel Pipe Industry |
| Duta Pertiwi vs. Lippo Cikarang Tbk | Duta Pertiwi vs. Lippo Karawaci Tbk | Duta Pertiwi vs. Intiland Development Tbk | Duta Pertiwi vs. Mitra Pinasthika Mustika |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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